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Minnesota Sustains Greater Long-term If employment grows faster than the number of workers Job Growth over a long time, the result will be a tight labor market. This is already occurring in many parts of Minnesota. Many rural employers have had difficulty finding work- Over the last quarter-century,job growth in Minnesota ers for some positions. In the Twin Cities area,the tight has closely followed national trends. Both state and na- labor market has produced higher wages at the lower end tional developments have been strongly affected by busi- of the wage scale. ness cycles, with the rate of job growth falling during recessions and rising during periods of economic expan- The United States as a whole has experienced a similar sion.Minnesota's employment growth from 1969 to 1994 but less pronounced trend,with jobs growing faster than was 72.6 percent,compared to a national average of 58.9 population or employed people. Jobs in Minnesota grew percent.The greater long-term gain in Minnesota stems twice as fast as population from 1988 to 1994,compared from relatively strong performance in the 1970s and dur- to 1.3 times as fast in the nation as a whole.Apparently ing the most recent recession.In the recession of 1990 to Minnesota has been more affected by trends toward 1992,Minnesota continued to gain jobs,though at a mod- higher labor force participation. est rate, while the number of jobs dropped nationally. This contrasts with what happened in the early 1980s recession, when employment in Minnesota dipped at Service Industry Employment Registers about the same rate as the national average. Large Gain Jobs in Minnesota have been increasing_faster than the total population and the number of employed people.Be- Service industry groups accounted for almost half of the tween 1988 and 1994,population grew at an average an- net gain in Minnesota employment from 1988 to 1994, nual rate of 1.0 percent;the number of employed persons adding almost 162,000 jobs. Service employment also went up an average of 1.6 percent; and the number of registered the second highest rate of growth—24 per- jobs rose at a 2.1 percent rate. cent—among major industrial categories. Some of the service industries contributing to this gain were business The fact that the number of employed people has grown services,health services,amusement and recreation ser- faster than the population suggests rising rates of labor vices,and social services.Business services include tem- • force participation. The more rapid growth of employ- porary help and computer services,both industries that ment than of employed people possibly reflects more have been thriving since the early 1990s.The temporary people holding two or more jobs, as well as more people help industry has grown as employers have turned to commuting from Wisconsin and other border states to consultants and outside labor providers instead of hiring work in Minnesota. How the BEA measures self-employ- permanent workers.The health care industry has made ment may be a factor; many of the self-employment jobs a strong showing for many years,with recent growth oc- picked up by the BEA are probably part-time or casual in curring mainly in settings outside hospitals, such as nature. home care and clinics. The popularity of gambling casi- Employment in Most Industries Strong Employment Growth in Midwest Grew Faster in Minnesota Than in Nation Average Annual Percent Change— 1988 to 1994 Percent Change—1988 to 1994 Manufacturing 7% Minnesota 2.1% Retail ° 2. g% ° South Dakota ° 5.6% Services 24% 20% North Dakota 70 . 4.4% Farm 7 Finance,Insurance, 9% Wisconsin 1 2.1% &Real Estate -1 All Other 11% Iowa 1.9%0.6% TOTAL 13% United States ° 1.2 8% -0.8/0; i ■Minnesota 13 United States ■Total Employment Growth ®Manufacturing Growth Source:U.S.Bureau of Economic Analysis Source:U.S.Bureau of Economic Analysis 2 Minnesota Planning June 1996